This is general information, not tax advice.
The short version for households
Most homeowners never touch the money. They assign their STCs to the installer and pay a lower invoice. A discount on the price of something you buy for your own home is not income, and the ATO has treated the assignment of STCs by households on that basis. You do not receive a cheque, so there is nothing to report on the usual household return.
Where it can differ
| Situation | Position (general) |
|---|---|
| Household assigns STCs, pays reduced invoice | Generally not assessable income |
| Household creates and sells STCs itself for cash | Seek advice, tax treatment can differ |
| Business buys the battery | The discount interacts with cost and deductions |
| Rental property owner | Depends on how the battery is used and held |
| GST-registered seller or business | GST consequences, see below |
For businesses the more relevant questions are what cost is depreciable and whether the instant asset write-off applies; see businesses depreciating a battery after the STC discount. GST is a separate matter, covered in battery rebate GST.
Other benefits are a different story
The federal discount is not the only money on offer. A VPP payment, a bill credit or an export payment may count as income, or may be treated as a reduction of electricity cost, depending on how it is structured. State grants are not uniform either. Look at each source on its own and keep the paperwork.
Why the answer is not the same as for a payment
A rebate that arrives as cash is different from a discount that never reaches your hands. Tax law generally looks at what you actually receive and why. Because the household’s STCs are exchanged for a lower price, the household has simply paid less for the battery. That is also why the batteries’ STC discount does not reduce a household’s deductions: a home battery for private use is not a deductible expense in the first place.
If you later sell the home, the discount does not normally create a taxable event for a main residence either. The picture changes if the property is an investment or the battery is used in a business, which is where specific advice becomes worth paying for.
What to keep
Keep the invoice with the STC discount shown, the signed assignment form and the commissioning documents. If the ATO or your accountant asks how the discount was treated, those documents answer it. The invoice layout is covered in how the discount is shown on an invoice.
From the desk: if your installer says the rebate is “tax free”, ask them to point to the ATO guidance or tell you to check. Installers should not give tax advice, and neither should this page.
The solar equivalent is on solar rebate taxable. To see what the discount is on your battery, use the battery STC calculator, and read the scheme on battery STCs.